Federal Court: Bloggers Have Same First Amendment Rights As Journalists

There was an important decision last week in the United States Court of Appeals for the Ninth Circuit in which a panel ruled that bloggers are entitled to the same protections as journalists. The decision is in sharp contrast to the view of Senator Dianne Feinstein and Obama Administration officials who have fought against such protections for bloggers in a new federal shield law. The opinion was handed down on January 17, 2014 in Obsidian Finance Group v. Cox.

The decision came in a defamation lawsuit where the panel ordered a new trial in the case of Crystal L. Cox, a blogger from Eureka, Montana. Cox was sued for defamation by attorney Kevin Padrick and his company, Obsidian Finance Group LLC, after she wrote about what she viewed as fraud, corruption, money-laundering and other illegal activities. Patrick and Obsidian were hired by Summit Accommodators, which had defrauded investors. Padrick and Obsidian advised Summit before a filing for bankruptcy and the U.S. Bankruptcy Court later appointed Padrick trustee in the Chapter 11 case.

Some of Cox’s allegations were indeed quite raw and over-the-top, as noted by the court. She accused “Padrick and Obsidian of engaging in “illegal activity,” including “corruption,” “fraud,” “deceit on the government,” “money laundering,” “defamation,” “harassment,” “tax crimes,” and “fraud against the government.” Cox also claimed that Obsidian paid off “media” and “politicians” and may have hired a hit man to kill her.” There is one site entitled simply “Obsidiansucks.” The site shows Cox’s picture above with the pledge “I promise to expose Kevin Padrick.”

Notably, the district court held that “all but one of Cox’s blog posts were constitutionally protected opinions because they employed figurative and hyperbolic language and could not be proved true or false.” Obsidian Fin. Grp., LLC v. Cox, 812 F. Supp. 2d 1220, 1232-34 (D. Or. 2011). However, one posting on December 25, 2010 on bankruptcycorruption.com was found to have made “fairly specific allegations [that] a reasonable reader could understand . . . to imply a provable fact assertion”—i.e., that Padrick, in his capacity as bankruptcy trustee, failed to pay $174,000 in taxes owed by Summit.” The one posting was allowed to go to trial and the jury found in favor of Padrick and Obsidian, awarding the former $1.5 million and the latter $1 million in compensatory damages.

District Judge Marco A. Hernandez ruled that Padrick and Obsidian were not required to prove either negligence or actual damages because Cox had failed to submit “evidence suggestive of her status as a journalist.” Obsidian Fin. Grp., LLC v. Cox, No. 3:11-cv-00057-HZ, 2011 U.S. Dist. LEXIS 137548, 2011 WL 5999334, at *5 (D. Or. Nov. 30, 2011). Hernandez further ruled that neither Padrick nor Obsidian was an all-purpose public figure or a limited public figure based upon Padrick’s role as a bankruptcy trustee because “they had not injected themselves into a public controversy, but rather that Cox had “created the controversy . . . .” 2011 U.S. Dist. LEXIS 137548, [WL] at *4.

The case raises in New York Times Co. v. Sullivan which held that, when a public official seeks damages for defamation, the official must show “actual malice”—that the defendant published the defamatory statement “with knowledge that it was false or with reckless disregard of whether it was false or not.” Id. at 280. Later, in Gertz v. Robert Welch, Inc., the Court held that the First Amendment required only a “negligence standard for private defamation actions.” 418 U.S. 323, 350, 94 S. Ct. 2997, 41 L. Ed. 2d 789 (1974). The question is what a blog is: more like a journalist or a private communication. The court noted that

“[t]he Gertz court did not expressly limit its holding to the defamation of institutional media defendants. And,

although the Supreme Court has never directly held that the Gertz rule applies beyond the institutional press, it has repeatedly refused in non-defamation contexts to accord greater First Amendment protection to the institutional media than to other speakers.”

The court relied on Citizens United for support this broader view of free speech. Consistent with a couple of other circuits, the panel ruled:

The protections of the First Amendment do not turn on whether the defendant was a trained journalist, formally affiliated with traditional news entities, engaged in conflict-of-interest disclosure, went beyond just assembling others’ writings, or tried to get both sides of a story. As the Supreme Court has accurately warned, a First Amendment distinction between the institutional press and other speakers is unworkable: “With the advent of the Internet and the decline of print and broadcast media . . . the line between the media and others who wish to comment on political and social issues becomes far more blurred.” Citizens United, 558 U.S. at 352. In defamation cases, the public-figure status of a plaintiff and the public importance of the statement at issue—not the identity of the speaker—provide the First Amendment touchstones.

We therefore hold that the Gertz negligence requirement for private defamation actions is not limited to cases with institutional media defendants. But this does not completely resolve the Gertz dispute.

The court then goes on to rule that this was a matter of public concern.

Unlike the speech at issue in Dun & Bradstreet that the Court found to be a matter only of private concern, Cox’s December 25 blog post was not “solely in the individual interest of the speaker and its specific business audience.” 472 U.S. at 762 (plurality opinion). The post was published to the public at large, not simply made “available to only five subscribers, who, under the terms of the subscription agreement, could not disseminate it further . . . .” Id. And, Cox’s speech was not “like advertising” and thus “hardy and unlikely to be deterred by incidental state regulation.” Id.

Because Cox’s blog post addressed a matter of public concern, even assuming that Gertz is limited to such speech, the district court should have instructed the jury that it could not find Cox liable for defamation unless it found that she acted negligently. See Gertz, 418 U.S. at 350. The court also should have instructed the jury that it could not award presumed damages unless it found that Cox acted with actual malice. Id. at 349.

The panel goes on to rule against Cox in saying that the lawyer and the group are not public figures. However, that still requires a new trial with the added protections afforded to the blog.

The panel also clarified the standards applied in the cross appeal on what constitutes opinion while (ironically) Cox’s heated language worked to her advantage:

In Milkovich v. Lorain Journal Co., the Supreme Court refused to create a blanket defamation exemption for “anything that might be labeled ‘opinion.'” 497 U.S. 1, 18, 110 S. Ct. 2695, 111 L. Ed. 2d 1 (1990). This court has held that “while ‘pure’ opinions are protected by the First Amendment, a statement that ‘may . . . imply a false assertion of fact’ is actionable.” Partington v. Bugliosi, 56 F.3d 1147, 1153 (9th Cir. 1995) (quoting Milkovich, 497 U.S. at 19). We have developed a three-part test to determine whether a statement contains an assertion of objective fact. Unelko Corp. v. Rooney, 912 F.2d 1049, 1053 (9th Cir. 1990). The test considers “(1) whether the general tenor of the entire work negates the impression that the defendant was asserting an objective fact, (2) whether the defendant used figurative or hyperbolic language that negates that impression, and (3) whether the statement in question is susceptible of being proved true or false.” Partington, 56 F.3d at 1153.

As to the first factor, the general tenor of Cox’s blog posts negates the impression that she was asserting objective facts. The statements were posted on obsidianfinancesucks.com, a website name that leads “the reader of the statements [to be] predisposed to view them with a certain amount of skepticism and with an understanding that they will likely present one-sided viewpoints rather than assertions of provable facts.” Obsidian Fin. Grp., 812 F. Supp. 2d at 1232. The district judge correctly concluded that the “occasional and somewhat run-on[,] almost ‘stream of consciousness’-like sentences read more like a journal or diary entry revealing [Cox’s] feelings rather than assertions of fact.” Id. at 1233.

As to the second factor, Cox’s consistent use of extreme language negates the impression that the blog posts assert objective facts. Cox regularly employed hyperbolic language in the posts, including terms such as “immoral,” “really bad,” “thugs,” and “evil doers.” Id. (quoting blog posts). Cox’s assertions that “Padrick hired a ‘hit man’ to kill her” or “that the entire bankruptcy court system is corrupt” similarly dispel any reasonable expectation that the statements assert facts. Id.

And, as to the third factor, the district court correctly found that, in the context of a non-professional website containing consistently hyperbolic language, Cox’s blog posts are “not sufficiently factual to be proved true or false.” Id. at 1234. We find no error in the court’s application of the Unelko test and reject the cross-appeal.

It is a major decision and one that further challenges the effort of Feinstein and others to strip bloggers of protections under media shield laws. The “new media” obviously concerns many politicians like Feinstein, who show the same hostility to bloggers as her predecessors once showed to the media before New York Times v. Sullivan. While the issues are not identical between the torts doctrines and media shield laws, the ruling undermines the argument that there is a clear line between bloggers and conventional reporters in dealing with public disputes and allegations. We have still not resolved how to draw the line (if such a line is possible) between conventional and new media. What is significant is that this court is refusing to expose bloggers to the type of pre-Sullivan liability that would dramatically chill Internet speech.

Cox posted what appears to be a running discussion on the case and the appeal including her confusion of distinction drawn over re-posting on the various site on which her views appeared:

Dredd, I have said here previously Feinstein’s views on bloggers is one of the more chilling views expressed by a politician in decades. Imagine what these pols are thinking if they’re willing to actually express this. They are not a forthcoming group, but she came right out w/ this outrageous comment.

Amazingly good decision, and reinvigorates the protections of the First Amendment.
I am particularly being impacted by the official view that blogging and other internet publishing I have done, in that I am in a proceeding right now where the opposing side has moved for a restraining order to prevent my internet reporting of our local county CPS corruption, claiming it is somehow harming my child to report this information.
The judge has not issued a ruling or restraining order yet, but the fact that it is even a serious concern harkens back to the medeival logic of silencing public detractors of official misbehavior.

As Professor Turley’s Blog details, websites, social media, YouTube and Blogging/Blawgs are the contemporary media with much more instant impact than anyone newspaper, radio and/or TV station.

Crystal Cox was out there assisting U.S. to get the word out on our eToys debacle and the federal corruption of Mitt Romney with former US Attorney Colm Connolly – doing so LONG before anyone else!

Has she made some faux pas – Probably So;
but there’s no school of ethics and protocols for bloggers.

This was an important decision for ALL of U.S.;
and I’m thankful to Crystal Cox for her zeal and good will!

A special hat tip goes out to UCLA Professor Volokh of the, and his co-worker Benjamin Souede of the Angeli Law Group LLC; who took on Crystal Cox’s case “pro bono” – realizing the higher issues at stake.

Very interesting case and I bet we have not heard the last of this one yet. I am hopeful, but not as optimistic that the ruling will stand. Feinstein et al are not going to sit still and let the commoners retain any power of them.

Dredd, I have said here previously Feinstein’s views on bloggers is one of the more chilling views expressed by a politician in decades. Imagine what these pols are thinking if they’re willing to actually express this. They are not a forthcoming group, but she came right out w/ this outrageous comment.===================
I full on agree with you Nick.

I found the opinion on Google. I am very impressed with the holding and the quality of the discussion of Supreme Court precedents. Forgive me for reprinting this but it is of great interest. Excerpts:

The district court here was fully informed before trial of
Cox’s First Amendment arguments and had rejected them
definitively before the close of evidence. “[A]ny further
objection would have been superfluous and futile . . . .”
Dorn, 397 F.3d at 1189. Indeed, in denying Cox’s new trial
motion, the district judge specifically noted that he had
instructed the defendant to raise her legal arguments in her
trial memorandum, and that he understood those arguments
to be that “she was entitled to certain First Amendment
protections, including requiring plaintiffs to establish liability
by proving that defendant acted with some degree of fault,
whether it be negligence or ‘actual malice.’” Obsidian Fin.
Grp., LLC v. Cox, 2012 WL 1065484, at *7. In ruling on the
new trial motion, the district court initially suggested that
Cox had waived those arguments by not objecting to the jury
instructions, but in the end again treated them on the merits
and rejected them. Under the facts of this case, Cox
preserved the issues raised in her motion for new trial for
review.
B.
The Supreme Court’s landmark opinion in New York
Times Co. v. Sullivan began the construction of a First
Amendment framework concerning the level of fault required
for defamation liability. 376 U.S. 254. Sullivan held that
when a public official seeks damages for defamation, the
official must show “actual malice”—that the defendant
published the defamatory statement “with knowledge that it
was false or with reckless disregard of whether it was false or
not.” Id. at 280. A decade later, Gertz v. Robert Welch, Inc.,
held that the First Amendment required only a “negligence
standard for private defamation actions.” 418 U.S. 323, 350
(1974). This case involves the intersection between Sullivan
and Gertz, an area not yet fully explored by this Circuit, in the
context of a medium of publication—the Internet—entirely
unknown at the time of those decisions.
1.
Padrick and Obsidian first argue that the Gertz negligence
requirement applies only to suits against the institutional
press. Padrick and Obsidian are correct in noting that Gertz
involved an institutional media defendant and that the Court’s
opinion specifically cited the need to shield “the press and
broadcast media from the rigors of strict liability for
defamation.” 418 U.S. at 348. We conclude, however, that
the holding in Gertz sweeps more broadly.
The Gertz court did not expressly limit its holding to the
defamation of institutional media defendants. And, although
the Supreme Court has never directly held that the Gertz rule
applies beyond the institutional press, it has repeatedly
refused in non-defamation contexts to accord greater First
Amendment protection to the institutional media than to other
speakers. In Bartnicki v. Vopper, for example, in deciding
whether defendants could be held liable under a statute
banning the redistribution of illegally intercepted telephone
conversations, the Court expressly noted that “we draw no
distinction between the media respondents and” a non
institutional respondent. 532 U.S. 514, 525 & n.8 (2001).
Similarly, in Cohen v. Cowles Media Co., the Court held that
the press gets no special immunity from laws that apply to
others, including those—such as copyright law—that target
communication. 501 U.S. 663, 669–70 (1991). And in First
National Bank of Boston v. Bellotti, a case involving
campaign finance laws, the Court rejected the “suggestion
that communication by corporate members of the institutional
press is entitled to greater constitutional protection than the
same communication by” non-institutional-press businesses.
435 U.S. 765, 782 n.18 (1978); see also Henry v. Collins, 380
U.S. 356, 357 (1965) (per curiam) (applying Sullivan
standard to a statement by an arrestee); Garrison v.
Louisiana, 379 U.S. 64, 67–68 (1964) (applying Sullivan
standard to statements by an elected district attorney);
Sullivan, 376 U.S. at 286 (applying identical First
Amendment protection to a newspaper defendant and
individual defendants).
The Supreme Court recently emphasized the point in
Citizens United v. Federal Election Commission: “We have
consistently rejected the proposition that the institutional
press has any constitutional privilege beyond that of other
speakers.” 558 U.S. 310, 352 (2010) (internal quotations
omitted). In construing the constitutionality of campaign
finance statutes, the Court cited with approval, id., the
position of five Justices in Dun & Bradstreet, Inc. v.
Greenmoss Builders, Inc., that “in the context of defamation
law, the rights of the institutional media are no greater and no
less than those enjoyed by other individuals engaged in the
same activities.” 472 U.S. 749, 784 (1985) (Brennan, J.,
dissenting); id. at 773 (White, J., concurring in the judgment)
(“[T]he First Amendment gives no more protection to the
press in defamation suits than it does to others exercising
their freedom of speech.”).
1 Like the Supreme Court, the Ninth Circuit has not directly
addressed whether First Amendment defamation rules apply
equally to both the institutional press and individual
speakers. 2 But every other circuit to consider the issue has
held that the First Amendment defamation rules in Sullivan
and its progeny apply equally to the institutional press and
individual speakers. See, e.g., Snyder v. Phelps, 580 F.3d
206, 219 n.13 (4th Cir. 2009), aff’d, 131 S. Ct. 1207 (2011)
(“Any effort to justify a media/nonmedia distinction rests on
unstable ground, given the difficulty of defining with
precision who belongs to the ‘media.’”); Flamm v. Am. Ass’n
of Univ. Women, 201 F.3d 144, 149 (2d Cir. 2000) (holding
that “a distinction drawn according to whether the defendant
is a member of the media or not is untenable”); In re IBP
Confidential Bus. Documents Litig., 797 F.2d 632, 642 (8th
Cir. 1986); Garcia v. Bd. of Educ., 777 F.2d 1403, 1410 (10th
Cir. 1985); Avins v. White, 627 F.2d 637, 649 (3d Cir. 1980);
Davis v. Schuchat, 510 F.2d 731, 734 n.3 (D.C. Cir. 1975).
We agree with our sister circuits. The protections of the
First Amendment do not turn on whether the defendant was
a trained journalist, formally affiliated with traditional news
entities, engaged in conflict-of-interest disclosure, went
1 Dun & Bradstreet held that presumed and punitive damages are
constitutionally permitted in defamation cases without a showing of actual
malice when the defamatory statements at issue do not involve matters of
public concern. See 472 U.S. at 763.
2 But cf. Newcombe v. Adolf Coors Co., 157 F.3d 686, 694 n.4 (9th Cir.
1998) (citing Gertz in a defamation case in which the lead defendant was
not a member of the institutional media).
–end footnotes-

beyond just assembling others’ writings, or tried to get both
sides of a story. As the Supreme Court has accurately
warned, a First Amendment distinction between the
institutional press and other speakers is unworkable: “With
the advent of the Internet and the decline of print and
broadcast media . . . the line between the media and others
who wish to comment on political and social issues becomes
far more blurred.” Citizens United, 558 U.S. at 352. In
defamation cases, the public-figure status of a plaintiff and
the public importance of the statement at issue—not the
identity of the speaker—provide the First Amendment
touchstones.
We therefore hold that the Gertz negligence requirement
for private defamation actions is not limited to cases with
institutional media defendants. But this does not completely
resolve the Gertz dispute. Padrick and Obsidian also argue
that they were not required to prove Cox’s negligence
because Gertz involved a matter of public concern3 and this
case does not.

“The people shall not be deprived or abridged of their right to speak, or to publish their sentiments; and the freedom of the press, as one of the great bulwarks of liberty, shall be inviolable.”- James Madison

Crystal Cox and I go WAY back;
because she was one of the 1st to take my side against “them”!

What is at issue in this case – IS – if Obsidian’s associates acted in bad faith.

They have – unequivocally!

Therefore (as in my Romney case) = the less press the issue gets – the better it is for the guilty parties. As in my case, the opponents hubris in “rigging” their case by power, money and might makes right over an indigent party;

was based upon the premise that the “issues” were indigent too!

EEEAANNNNTTTT!

Wonderful thing about poor people with a just cause being run over by oppressive bad faith bullies. Sooner or later, when the dog that is being kicked, bleeding; but refuses to give up the cause. Then brings forth a light upon the truth.

Bad faith parties needs public apathy and laxity;
and the truth just needs the light!

Crystal Cox got a solar flare of light by Professor Volokh and Benjamin Souede putting their Bar Card reputations on the line – giving credibility to the arguments that are core issue.

They should have sued her for libel/slander and then rigged the process that way. By going after her the way they did, they took on the entire web/blogging spectrum – turning Crystal Cox into a “we”.

Need the same thing in my case. For the press to stop considering what Romney & his RICO Gang have done and are doing to Laser Haas/eToys; and to start looking at the empirical evidence of Bain’s illicit slaughter of jobs, companies and pensions. Like Muhammad Ali said in the most perfect Haiku of all time;

Me
We!

Obsidian’s power and influence over the local fed jurisdiction;
just bit off more than they can chew!

[…] There was an important decision last week in the United States Court of Appeals for the Ninth Circuit in which a panel ruled that bloggers are entitled to the same protections as journalists. The decision is in sharp contrast to the view of Senator Dianne Feinstein and Obama Administration officials who have fought against such protections for bloggers in a new federal shield law. The opinion was handed down on January 17, 2014 in Obsidian Finance Group v. Cox. Continue reading → […]

[…] There was an important decision last week in the United States Court of Appeals for the Ninth Circuit in which a panel ruled that bloggers are entitled to the same protections as journalists. The d… […]

This is exactly, what we are faced in Germany: the administrations seeks a way, to get bloggers unter court threts. People incl. bloggers form the public oppinion and thus constitues democratic elements which we are missing so much